Following the Ministry of Commerce and Industry’s decision to give companies and institutions a 10-day deadline to disclose the identity of their beneficial owners — or face fines ranging from 1,000 to 10,000 dinars — regulatory discussions have resurfaced regarding the legal status of expired commercial licenses.
Sources informed Al-Rai that the Ministry does not intend to impose the beneficial ownership fines on approximately 140,000 companies whose commercial licenses expired a year or more ago.
These include personal, joint-stock companies, and sole proprietorships, but exclude listed companies. These entities are considered commercial bodies in the process of cancellation.
The Ministry has decided to reintegrate these expired licenses into its system to allow relevant government agencies to access their data and enable the owners to view this information. However, owners will only be allowed to take procedural steps related to dissolution and liquidation — not to make amendments or resume activity.
As part of efforts to identify actual beneficiaries, the Ministry had previously moved expired licenses to a separate, hidden electronic system. Sorting operations showed that around 62% of 228,000 commercial records had licenses that had been expired for at least a year — some for up to 40 years. Many of these licenses had been left incomplete due to legal disputes, budgetary issues, or abandonment of the business activity.
Officials have now decided to reintroduce this data into the Ministry’s main system but through a separate interface from valid licenses. This will allow business owners to access the information and initiate closure procedures if they choose, and it will also permit access by key government bodies, including the Ministries of Justice and Interior, the Public Institution for Social Security, and the Public Authority for Manpower. This development raises the question of how long the Ministry will keep this window open and why it doesn’t move forward with dissolving these entities itself.
Sources explained that multiple financial, legal, and procedural challenges prevent the Ministry from dissolving and liquidating these companies on its own. The process would require the appointment of legal and financial auditors, which comes with high costs—particularly considering the number of companies involved.
While the Ministry can suspend licenses that have expired for over a year and initiate dissolution for entities inactive for more than three years, complete removal from the commercial registry requires an application from the owners. This includes meeting legal requirements such as insurance clearance, labor file resolutions, and settling any outstanding legal or financial obligations.
Consequently, companies with expired licenses face two pathways: the Ministry may cancel licenses that have been inactive for over a year, while entities that remain inactive for three years are subject to dissolution and liquidation procedures.
Meanwhile, efforts continue to encourage compliance with beneficial ownership disclosure requirements. As of yesterday, approximately 11,000 commercial entities had yet to meet the disclosure requirement.
These include 5,740 sole proprietorships, 4,970 single-person companies, and 199 joint-stock companies. With the final deadline set for June 10, the Ministry plans to begin imposing financial penalties afterward, in line with the latest Financial Action Task Force (FATF) recommendations. These emphasize swift implementation of transparency, anti-money laundering, and counter-terrorism financing measures to enhance trust in Kuwait’s commercial environment.
